14 Things I Learned At Davos 2012

This was my eleventh trip to the World Economic Forum in Davos, Switzerland. My posts from the last few years can be found here:  2011, 2010. This year felt more subdued and fearful than the last few -- a pall cast by the continually roiling European debt crisis. While caution emanated from the economy, hope and positive vibes pulsed out of technology. Most of the under 30 and under 40 types at Davos have recently launched tech companies -- their energy and natural lean to the future kept the aging plutocrats on their toes. It's obvious that the digital economy approaches -- an economy in which no company, regardless of whether it sells tires, insurance, or machine tools will be able to expand market share and profit without continually thinking, "Digital first."
 
Aside from that lesson, here are 14 other things I learned...
 
1) Mick Jagger is short and appears to be entering his 12th decade. But he's still a great dancer.
 
2) 50% of the people in Middle East are under the age of 25. Demographics continues to drive political destiny. The Arab Spring will not be restricted to one season. A decade of turmoil lies ahead, caused by too many young people and not enough jobs.
 
3) A strange anomaly:  In a worldwide economy with high unemployment, many job postings remain unfilled. I met CEOs who are trying to hire thousands of people in the U.S. for IT services but can't find qualified candidates. So they are spending money to educate and train their new employees -- filling in the gaps left by what they characterized as incomplete education. 
 
4) Capital floods the world, but good people and ideas remain scare. Davos was over-run by venture capitalists, investment bankers, and hedge funds with lots and lots of money. But they kept complaining about a shortage of: 1) great new ideas, and 2) ambitious, talented people. If you're young and visionary in the world right now, it's pretty hard to avoid getting blasted in the face by a bag of money.
 
5) I like Angela Merkel, the Chancellor of Germany. She is smart, direct, confident, and powerful. She promised that Germany would stand by its friends, and that she would help Europe become "...even more European." I expect that when the debt crisis clears, the EU will be closer together, not further apart. 
 
 6) Desmond Tutu is one of the great men of the world. My favorite quote:  " If we are hollow morally, our world will collapse." Some other quotes which you may, or may not agree with: "We are all made for goodness, even bankers."  "If our world exacerbates our differences, then it will be an unstable world."  "We need a revolution run by women."  "The young are important because they dream."
 
7) According to economist Larry Summers, the German economic model (which is currently much admired), is, "...neither replicable nor sustainable." Why? All countries can't be net exporters (like Germany). Germany must become less German in the future -- less of a high exporter and more of a domestic consumer.
 
8) Economic development in Africa has stalled in the last few decades. I attended a session -- which included Presidents and Prime Ministers of several African countries -- where the discussion leader, former UK Prime Minister Gordon Brown, noted that there are fewer roads in Africa today than there were 30 years ago.
 
9) The Indian outsourcers like Wipro, Infosys and TCS are all searching for new business models. While their businesses remain profitable, they are slowly sliding toward commodity status. And with ever-increasing wage rates and stagnant pricing, the cracks are beginning to appear. Look for lots of change upcoming in this business.
 
10) World leaders are certain that Barack Obama will be re-elected. My informal poll of 62 WEFers from all political, business, and geographical walks of life called the election for Obama 61-1. Watch out Barack -- Davos rarely gets the future right...
 
11) Mexico will recover. Felipe Calderone, the Mexican President said that the country is building 150 new universities and now graduates more engineers per year than Germany. I may have to fact check this guy...
 
 12) The Stuxnet computer virus ushered in a much more dangerous new world of malware. This virus was "weaponized" meaning it was built to destroy. And it was targeted at infrastructure -- the most vulnerable and critical societal assets. The Code War (the coming cyberwar between countries) will take a dangerous turn if these types of malware propogate or evolve to a higher form.
 
 13) Adam Lashinsky's new book on how Apple operates, Inside Apple, contains a sobering idea for all of the over-educated Davos elite:  Apple follows none of the long-taught lessons of the world's business schools.
 
14) This recession has years to run. In January 2009 (right after the meldown), the bubbles were still in the champagne at Davos. In 2010, everyone was hunkered down. In 2011, attendees were hopeful that we were getting out of the ditch. This year there was a numbing realization that it's going to take more time to repair the damage and move on. Financial recessions destroy trust -- and its restoration can takes years, or, as some have argued, a generation.

Comments

Africa

8) Economic development in Africa has stalled in the last few decades. There are half as many roads in Africa as there were 30 years ago.

Who said this and do you believe it? It somehow neglects everything positive that is happening for the continent. Look at the gains in political stability. Look at progress in infrastructure. Look at the rise of technology and the emergence of a middle class. 6 of the 10 fastest growing economies are in Africa. What is the point of such a statement?

Africa

According to the panelists (most were presidents of African nations), much progress has been made (like the formation of capital markets), but there is still much work to do --particularly around infrastructure (like roads).

We have 2 speakers at CIO

We have 2 speakers at CIO Summit Africa (organiser is GDS) on 17-19th April, Cape Town. I will ask participants for their view - as there are business people from across the continent at this event. Certainly, the growth rate for South Africa in 2012 is forecasted to be 3.6% (c.f. Brazil 3.2%); source: OECD Nov 2011. SA is not the whole continent - so let's see what the Nigerians and Kenyans say.

Economy Strategy

Hi, George, thanks for sharing the fact, the observation, the thought and the humor about Davos, well, the content & context of conference is enriched, if we dig deeper, it might be, what's the global economy strategy concluded?

As we have many great online forums brainstorming strategy, what are the set of cholices or priorities the leaders at Davos have selected, to leverage the collaborative capabilities, and following a series of actions to make constructive competition, and lift up overall worldwide economy.

Davos may also need become the continuous brainstorming community via taking advantage of social computing, rather than an annual physical event.

Davos and social...

Emerging from its rather closed shell, the World Economic Forum has now headed aggressively toward social. The Web and apps for the community are much, much better than they have been over the years, and social has become a big part of those resources. Unfortunately (or perhaps fortunately), the WEF conversation never really stops anymore, with members continually exchanging ideas and resuming discussions that started in the Congress Center and transferring them over to social. The brainstorm has now become exhaustingly non-stop...

Davos

George, excellent insights from Davos. I really enjoy your blog and this one was particularly good for getting a feel for the sentiment there. Be sure to read the excellent piece in last week's New Yorker if you haven't already.

The New Yorker and Davos

Not a bad account -- but it was the account of a first timer.

It literally takes years to cut through all of the layers of the WEF onion and after more than a decade I'm sure I've missed or am not even aware of some of the layers...

Beyond all of the glitz, ego, and show business of the affair (which The New Yorker fixated on), there's actually quite a lot of substance to be found -- if you look hard enough.

I actually think that unleashing the press on the event (you can't swivel your head without getting hit by a camera lense) has put everyone on PR red alert, lowering the quality of discussions and stimulating a lot of primping for the ink-stained wretches...like The New Yorker...

It's good to see there is

It's good to see there is hope. Technology seems to be the favorite area for startup because of low cost to entry.

InnovativeSoftware (.info)

Why lack of Comments on China impact?

I recently attended a seminar at Cloud Valley at Shanghai.
An Observer commented, "why most Hong Kong delegates presented in English and the US/British/German delegates presented in Fluent Putonghua?"

In a globalization world with cross country sharing, some of the key ingredients of a leader should be multiple-lingual and understand and tolerate the cultural difference as well.

The Observer is a local Chinese, he did not speak fluent English nor fluent Cantonese like the Hong Kong presenters...remember Hong Kong was under the British colony for many years; we didn't have a putonghua class in our education system till return back to Mainland China. Also, even past Chairman Deng Xiao Ping' s Sichuan putonghua was difficult to be understood....China has so many dialects but just one Language...Putonghua.

My point is if you don't know, just learn it... I have good tips for you. I am still learning even I started selling NCR Tower 1632 UNIX box into China since 1983...why? The Cantonese's tongue changes too fast to speak as slow as the Chinese whose mother tongue is native in Putonghua. Have a nice new week Smile Eddie from Beijing.

Why lack of Comments on China impact?

I recently attended a seminar at Cloud Valley at Shanghai.
An Observer commented, "why most Hong Kong delegates presented in English and the US/British/German delegates presented in Fluent Putonghua?"

In a globalization world with cross country sharing, some of the key ingredients of a leader should be multiple-lingual and understand and tolerate the cultural difference as well.

The Observer is a local Chinese, he did not speak fluent English nor fluent Cantonese like the Hong Kong presenters...remember Hong Kong was under the British colony for many years; we didn't have a putonghua class in our education system till return back to Mainland China. Also, even past Chairman Deng Xiao Ping' s Sichuan putonghua was difficult to be understood....China has so many dialects but just one Language...Putonghua.

My point is if you don't know, just learn it... I have good tips for you. I am still learning even I started selling NCR Tower 1632 UNIX box into China since 1983...why? The Cantonese's tongue changes too fast to speak as slow as the Chinese whose mother tongue is native in Putonghua. Have a nice new week Smile Eddie from Beijing.